Yes, that's what everyone is believing, and everyone is
long, based on 2004 mega-rally. These rallies are done
in the futures markets, with 15,000-18,000 e-mini contracts
per minute purchases by some entity, throwing indices up.
I don't know who that is, although I suspect it's the naked
put shorts. All I know is that entity is able to stop the
decline, when everyone else is selling, and it is able to
initiate one when everyone else is buying. Expiry week is
usually perfect for trend change. Perhaps, after expiration.
That entity seems to be following the spiral (perfect manipulation? -g-). There may be
some 10-25 SP points left to the upside, before the spiral
issues a sell. I believe this is just structural support in the
markets due to active options trading. So the entity could be
many banks, market makers in the options market, following
common delta-hedging.
The fact of the matter is, if someone is short a lot of puts
naked, counting on the Fed to inject liquidity, this creates
a situation in the markets similar to 1987 portfolio insurance.
Once the price action breaks put strike levels, the entity must sell SP futures, creating an avalanche of selling. |
